Gov't Confused to Determine Consolidating Bank

The government seems to be confused to determine the consolidating bank in the implementation of the central bank's (BI) single presence policy. The government is in the dilemma to choose between PT Bank Mandiri Tbk and PT Bank Negara Indonesia (BNI) Tbk.

"Actually, it is Bank Mandiri that can better serve as the consolidator, but BNI has a long history. We will ask for dispensation regarding Bank Mandiri and BNI, while retaining BRI," revealed State Minister for State Enterprises Sofyan A. Djalil in Jakarta last week.

He explained the deadline for the implementation of the single presence policy would come to an end soon, so that BI and the State Ministry for State Enterprises-the latter of which is the shareholder of five state banks, namely Mandiri, BNI, BRI, BTN, and Bank Ekspor Indonesia (BEI)-needed to discuss the issue soon.

The determination of the consolidating bank, also termed anchor or holding bank, might spark another problem as the three banks (Mandiri, BNI, and BRI) had been equally vital in the national banking industry.

BNI has a long history and once the largest bank in Indonesia before being replaced by Mandiri, which is the result of a merger of four banks. In the meantime, BRI has been strong as a business entity and has become the world's benchmark for micro-financing.

BI gives deadline until the yearend to the shareholders owning stakes in more than one bank to submit their business plans. The single presence policy will be brought into effect in 2010, but will not apply to foreign and composite banks.